Earnings’ Final Cut: What Analysts Have To Say About Twitter Inc (TWTR) and PCM Inc (PCMI)

As the peak of earnings season continues, analysts are weighing in on Twitter Inc (NYSE:TWTR) and PCM Inc (NASDAQ:PCMI), with mixed ratings and views. Let’s take a closer look:

Twitter Inc

As Wall Street debates Twitter’s third-quarter results, Baird analyst Colin Sebastian is out with his insights. Overall, Twitter reported better-than-feared third-quarter results, with revenue and EBITDA ahead of the Street, and provided in-line fourth-quarter guidance. As such, Sebastian raised his price target for the stock to $17 (from $16), while reiterating a Neutral rating.

Sebastian commented, “Twitter reported 3Q16 results modestly above tempered expectations, and provided what we interpret to be in-line Q4 guidance, notable given the anticipated disruption from the sales force realignment. Importantly, daily user growth and engagement continue to accelerate, driven primary by product improvements for new/existing users. We note a more positive tone from management, as the company gears up for possibly better growth trends next year.”

As usual, we like to include the analyst’s trackrecord when reporting on new analyst notes. Sebastian has a very good TipRanks score with a 73% success rate and he stands at #10 out of 4,188 on the analyst leaderboard.

Out of the 42 analysts polled by TipRanks, 6 rate Twitter stock a Buy, 27 rate the stock a Hold and 9 recommend a Sell. With a downside potential of 2%, the stock’s consensus target price stands at $17.26.

PCM Inc

PCM shares rose nearly 29% in Thursday trading session, after the marketing company released third-quarter results, posting net income of $3.5 million, or $0.43 per share on a 44% y/y increase in revenue to $584.9 million versus a $785,000 loss or ($0.07) per share on revenue of $404.9 million a year earlier.

In reaction, Roth Capital analyst William Gibson upgraded PCM shares from Neutral to Buy, while raising the price target for the stock to $24 (from $20.50).

Gibson wrote, “Our 4Q16 and 2017 revenue estimates are unchanged, but we raised our earnings estimates, largely to reflect a 14.0% gpm estimate in both 4Q16 and 2017 from 13.9% and 13.7% respectively before. Our GAAP earnings estimate is $4.5 million or $0.36 per share in 4Q16 and our adjusted earnings estimate is $0.45. Our new 2017 earnings estimate is $21.8 million or $1.75 per share and our adjusted earnings estimate is $2.05.”

“Using an EV/Adjusted EBITDA multiple of 7.5x our 12-month forward adjusted EBITDA estimate, we are raising our 12-month price target to $24 from $20.50 previously. Following a downgrade in late August based solely on price, we are raising our rating to Buy from Neutral,” the analyst continued.

According to TipRanks.com, analyst William Gibson has a yearly average loss of 9.5% and a 38% success rate. Gibson has a 56.3% average return when recommending PCMI, and is ranked #3759 out of 4188 analysts.